Explanatory Memorandum
(Circulated by authority of the Parliamentary Secretary to Treasurer, Senator the Hon Ian Campbell)Outline
This Bill makes amendments to Commonwealth legislation that are consequential to the Financial Services Reform Act 2001. This Bill:
- (a)
- facilitates implementation of the Government's superannuation and family law reforms; and
- (b)
- corrects a drafting error in the Corporations Act arising from amendments made to that Act by the Financial Services Reform Act 2001.
Regulatory impact statement
The Office of Regulation Review has advised that a Regulatory Impact Statement is not required for this Bill.
Financial Impact Statement
This Bill does not have any financial impact.
Notes on Clauses
Clause 1: Short Title
1. Clause 1 is a formal provision specifying the short title of the Bill.
Clause 2: Commencement
2. Clause 2 provides that each provision of the Bill will commence as set out in the table. Sections 1 to 3 will commence on the day the Bill receives Royal Assent. Schedule 1 will commence immediately after the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001. Schedule 2 will commence immediately after the commencement of Schedule 1 of the Financial Services Reform Act 2001 which has been proclaimed to commence on 11 March 2002.
Clause 3 - Schedules
3. This clause provides that each Act as specified in a Schedule to the Bill is amended or repealed as set out in the applicable items in the Schedule.
Schedule 1 - Amendment of the Retirement Savings Accounts Act 1997
4. The Retirement Savings Accounts Act 1997 (the RSA Act) allows banks, building societies, credit unions and life insurance companies to provide superannuation without a trust structure in the form of a Retirement Savings Account (RSA).
5. Section 41 provides that a charge over, or in relation to, an RSA has no effect and that benefits provided under an RSA cannot be assigned. Under subsections 41(3) and 41(4) of the RSA Act it is an offence for an RSA provider to recognise, or in any way encourage or sanction, a charge over an RSA or an assignment of benefits provided under an RSA.
6. Items 1 and 2 amend section 41 to ensure that an RSA provider can comply with regulations which will allow an RSA interest to be split and a separate interest to be created in the name of the RSA holder's former spouse. The regulations will facilitate implementation of the Government's superannuation and family law reforms contained in Part VIIIB of the Family Law Act 1975, inserted by the Family Law Legislation Amendment (Superannuation) Act 2001.
7. The amendment will commence immediately after the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001.
Schedule 2 - Amendment to the Corporations Act 2001
8. The Financial Services Reform Act 2001 (FSR Act) received Royal Assent on 27 September 2001. As a result of a drafting error, Item 329 of Part 2 of Schedule 1 of the FSR Act, commencing on 11 March 2002, would repeal section 95A of the Corporations Act. Section 95A defines the term "insolvency" generally for the purposes of the Corporations Act. It was intended only that subsection 95A(3) be repealed. Subsection 95A(3) indicated what the term 'insolvency" meant for a particular purpose, that is for the operation of the National Guarantee Fund provisions in Part 7.10 (now dealt with in regulations).
9. Item 1 reinserts section 95A into the Corporations Act 2001, effectively restoring subsections 95A(1) and 95A(2) to the Corporations Act.
10. There is no change to existing policy. The wording of subsections 95A(1) and 95A(2) was first included in the Corporations Law by the Corporate Law Reform Act 1992 and has been the operative definition since 23 June 1993.
11. The repeal of section 95A made by the Financial Services Reform Act is due to take effect on 11 March 2002. The reinsertion of section 95A will commence immediately after item 329 of Schedule 1 of the Financial Services Reform Act 2001 commences.